“The next step is for the Government Data Retention Implementation Working Group to meet and review the weightings that are to be used to help calculate how much subsidy funding each eligible service provider will receive,” a statement from the industry group said.

“That meeting has not yet been scheduled.”

Internet Australia CEO Laurie Patton said his organisation had not been invited to join the Implementation Working Group despite requesting to participate.

“When it comes to the review of the weightings for the data retention funding, the risk is that the industry as a whole will not be happy with the outcome,” Patton said.

“Moreover, IA seeks to have an involvement in this process on behalf of all Internet users. The best estimates, including those from PwC obtained by the government, indicate that the funding allocated to ISP’s is well less than half of what will be the full cost.

“Inevitably this shortfall will result in increased Internet access fees. There is a danger that if the weightings are not appropriate some of the smaller ISP’s will close up shop.”

“This could be particularly unhelpful in regional areas where smaller ISPs are able to provide a more personal service because they actually know their customers and often provide them with other IT products and services,” Patton added.

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